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tv   Power Lunch  CNBC  May 24, 2022 2:00pm-3:00pm EDT

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rogers today reporting. and we will speak to the ceo of advanced auto parts about how inflation and supply chains are impacting their business that's ahead on "power lunch," which begins right now kelly, thank you very much, and welcome, everybody, to "power lunch" for a tuesday. i'm tyler mathisen, and here is what's ahead on what promises to be yet another busy hour a rough day on wall street yet again, but stocks are attempting a bit of a comeback off the lows still, profit and sales warnings from companies are spawning recession fears left, right, and center this hour the outlook for growth here and around the world, we'll examine the charts and whether the technicals are pointing to a bottom, and we'll look to consistent dividend growers as potential safety plays first, though, kelly's got a check on these markets kelly. >> i do, tyler, thank you very much hi, everybody, so we're off session lows, but it's still negative the dow's down 135, the s&p down
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59 to 20 the nasdaq down more than 300 points right now it's off the lows as i mentioned. this 2.6% drop compares with about a 4% slide earlier on. at one point, more than 90% of the nasdaq 100 components were negative and the ten-year yield garnering all the headlines with the sudden move lower around 930 275 is our current level, we got down to about 273. if we go below there, a lot of people are saying next stop could be much lower, ty. >> kelly, economists are debating the risk of recession, stagflation, overall growth concerns, and today we get data points from different segments of the economy that could be pointing to a slowdown on the digital front, you got snap, the ceo there warning that the macro environment has deteriorated further and faster than we anticipated, the stock falling an almost unheard of 40% today. the best buy ceo says she
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expects softer demand to stick around for a while that would be best buy and aberc abercrombie & fitch issuing a weak outlook as well let's get to homes now, sales of newly built homes sank in april to the slowest rate since the start of the pandemic, and on the industrial front, we've got a wave of pmi data across the globe. it came in weaker than expected, and those purchasing managers, they don't not mess around our reporters are covering the stories. julia boorstin on snap, courtney reagan on retail, diana olick on housing, steve liesman on global growth, and julia, we begin with you. >> well, tyler, snap shares down 41% on the company's warning that second-quarter revenue and adjusted earnings will likely be below the low end of its guidance range it provided for the quarter just a month ago snap saying in its 8k filing, quote, the macro environment has
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deteriorated further and faster than we anticipated when we issued our quarterly guidance last month as a result, while our revenue continues to grow year-over-year, it is growing more slowly than we expected at this time. this warning that revenue growth will be below 20% is a dramatic slowdown from the 44% revenue growth that snap said it saw at the beginning of the year before russia's invasion of ukraine jeffries weighed in saying this is a sign that a, quote, macro environment that will likely impact the whole ad industry, and it is highly unlikely the weakness is isolated as we expect macro to impact all digital ads names. snap's warning and analysts concerns about the whole industry is likely to feel this impact sending those other ad-driven stocks plummeting. meta shares down 8.5%, pinterest down 2%, and even alphabet and
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amazon are lower alphabet down nearly 6%, and amazon down over 3%. kelly. >> yeah, huge moves, julia, thank you very much. let's turn to retail where ceos are issuing the same warning about the economy. courtney reagan has those comments for us. court. (. >> >> most retail ceos are certainly using caution in their tone, but stopping short of forecasting a recession. on its earnings call, best buy's ceo said, it's quote, factoring in elements of softer demand, but we are not planning for a full recession whatever full means, acknowledging, quote, macro conditions worsened since giving its guidance in early march, which led to lower sales and higher supply chain costs. barry also acknowledged the duality for consumers with relatively strong balance sheets, they continue to spend wages are up and unemployment is at record lows, but are also lapping stimulus income with higher gas and food prices, rising interest rates and mortgage rates, recession fears,
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stock market volatility, g geopolitical instability, and more spend on services and those associated activities. on the abercrombie earnings call, ceo fran horowitz told investors it's, quote, an interesting time and pointed out low unemployment in the united states with high wages, and a desire for all of us to return to normalcy but also in a, quote, extremely inflationary period, which she expects will weigh on confidence and its company sales, though this was the best first quarter for sales for abercrombie since 2014 still, shares are down 31% tyler. >> thank you very much let's move on now to housing, which everybody knew was starting to slow but not this much this fast diana olick has the latest numbers for us >> yeah, hi to look at this one twice when it came out, sales of newly built homes dropped over 16% month to month in april, down nearly 27% year-over-year to the lowest level since april
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of 2020. those two terrible months at the start of the pandemic for home sales, mortgage rates clearly a factor here as shot significantly higher in april when these contracts were signed since newly built homes are generally pricier than existing, it means buyers are more likely stretching still, and this one is surprising, median price shot up nearly 20% year-over-year to well over $450,000 builders have been saying that they continue to have pricing power because of the shortage of homes in the existing market but that may be short lived. since the supply of new construction jumped to a nine-month supply from six in march, that is a lot of supply six is considered balanced needless to say, the builder's stocks are not taking this well, and they've been pretty beaten up already etf itb way down, and big names like lennar, pulte and dr horton down well over 30% year-to-date, and toll brothers, the luxury builder, they're set to report after the bell today, also way down we'll be watching toll for any
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comment on rising cancellation rates, which we're starting to hear more about now on both new and existing home sales contracts. back to you. >> all right, diana, thank you where does all of this leave the economy overall? steve liesman is here with new economic data out today and what it's telling us. steve. >> yeah, kelly, we had some notable misses in the economic data to go along with the big housing miss, suggesting definitely some loss of economic momentum it's just also the high prices and rate hikes are catching up with companies and the economy and potentially the consumer here flash u.s. services businesses activity index at 53.5 thunderstorm a four-month low. the manufacturing output index at 55.2. that's a three-month low now, note both still signal expansion of the economy, just at a slower pace richmond fed, though, not signaling very much at all, down 23 that's the lowest since the pandemic began here. but michael england writes we've
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had a bad couple of days for the u.s. growth outlook, and we've trimmed our q2 gdp growth estimate to 3.4% from 3.6 with emerging downside risk that said, several economists remain upbeat on the consumer and spending despite warnings from walmart and target last week over at barclays they say the narrative of the demise of the u.s. consumer is greatly exaggerated. even with higher prices flattering the nominal numbers, agate data suggests that the u.s. consumer is still spending at a healthy clip and even on goods. some slowing was inevitable here as companies were not going to be able to pass along higher prices forever, and higher rates are now working their way into the economy. the debate remains whether the economy can escape with just a slowing or if it's headed for an outright or full recession, kelly. >> our next guest is going to weigh in on that, steve, thank you very much. he says this isn't just a slowdown it will be a recession, and the bond market is saying it will start sometime in 2003
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let's bring in kumar global strategies president it's great to see you again. we've been sort of following, i think, and you've well captured this turn in yields when we were at historic lows and we shot higher as you've written about and talked about the fed was behind the curve. where do rates go from here? what is the bond market telling us, and what happens with this recession? >> kelly, those are all great questions. i think the fed is in an impossible situation, having miscalculated inflation for so long and having delayed the rate hikes and having inflated the balance sheet, what they find themselves in today is that inflation is very high a lot of it is beyond their control like the russian war, the shanghai shutdown. those are causing it, so the fed is very, very much behind the curve. so that is what you see taking place. in terms of what it does to the economy, this reminds me so
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much, kelly of how we were in 2006, 2007, when people were still saying, oh, is there ever going to be a recession at all and recall that in july 2008 when we were at the verge of a big drop, the european central bank increased interest rates in the beginning of july saying the global economy is very strong. >> right >> i find a lot of similarities. yes, the labor market is very strong, but i don't think it is going to stay that way i think the achilles heel in all of that, kelly, is the fact that inflation is way, way too high it's going to take a lot of fed tightening to bring it down anywhere near 2% they may not be able to do that for a while and that is where the risk to the economy lies >> the risk because it's just going to run hotter than the fed wants for longer what is the risk that the fed has to basically settle for that
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higher inflation and a slower than optimal economy, which is sort of the definition of stagflation. is that what we're in for, including in your view a full-fledged recession sometime next year? >> tyler, that is a great question the fed could have settled for a higher rate of inflation persisting for a longer period of time, let's say they would have settled at 3 or 3.5% and say we are going to be there, not at 2%, but that option was lost in the middle of 2021 they have since been inflating the balance sheet. they have continued with zero interest rates for almost one year longer, which means today the fed does not have that option of accepting a slightly higher inflation rate, the inflation rate is going to be significantly higher of course general power can say i didn't anticipate the russia/ukraine war but nobody does, but you do not
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conduct monetary policy assuming the world is going to be perfectly stable to allow you to do your tightening so by delaying it, he lost degrees of freedom, and now is going to force to tighten into a slowing economy. we saw the yield curve already invert once. we have come back to positive level, tyler, but i think we are going to invert again, and that's what happened repeatedly in 2006 before the great recession began december 2007. >> so if i accept your hypothesis here of a slowing economy, potentially a recession with higher than optimal inflation. what should i do to protect my capital or take advantage of pockets of opportunity what should i do >> you should behave very differently than you did in past recessions and past periods of high inflation because today you're going to have a combination of both of
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them that means in your behavior you cannot just go into bonds because the bonds will lose value due to inflation you cannot go into equities because equities will lose value because of a recession and fall off in corporate earnings. so what you do is to look on the short end, at short duration, fixed income paper you look at cash, you look at gold, and longer term you look at commodities you look at globally diversified areas to go into like real estate so you can protect your value against inflation for the next five to zen seven years. so this argues you to go away from a typical 60/40 investment strategy, tyler, and to be very innovative in terms of where you are going to be over the short-term and the medium term. >> all right, that's the prescription from sri-kumar. good as always to see you. thank you. >> thank you, tyler.
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>> you bet. coming up, advanced auto parts citing rising costs in its earnings report. the stock down 26% this year we'll ask the ceo if there are any signs that things are starting to ease and later looking for income as volatility spikes should you hide out in companies that consistently grow their dividends? and here's a look at the dow, which is close to going positive look at that your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit
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shares of advanced auto parts off about 1% extending its month-long decline that sent the stock down 17% over the past month. the auto parts retailer reported a slight decline in quarterly profit as it contends with higher costs and questions about the health of the consumer joining us now for "power lunch" exclusive is advanced auto parts kratom greko, welcome back good to have you with us part of the reason for the numbers was comps, wasn't it i mean, you had a tremendous first quarter in 2021 as the economy bounced back >> good afternoon, tyler, and thanks for having me yeah, we comped on top of about a 25 comp last year. we knew the first quarter was going to be our most challenging of the year, and we're really pleased that we're able to
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affirm our full-year guidance at a time that has been pretty volatile for broader retail. embedded in there is comp sales growth for the full year we just had our eighth consecutive quarter of comp sale growth there's very few retailers out there that are doing that. and continuing our track record of substantial cash return, our shareholders, we return over $400 million to shareholders in the first quarter. in the current environment, being able to pop a double-digit eps here in 2022 on top of 48% growth last year puts us in a pretty rare air as far as retailers. >> the comp sales growth was small, but it was growth as you point out. let's talk a little bit about margins. that is on every ceo's list these days how are they being affected by rising costs of materials, of wholesale goods, of labor, and how have you been able to maintain or even expand margins, as you say you plan to do?
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>> yeah, well, it certainly is a unique environment, and you heard it from your previous guest. i mean, we're fortunate that we have a number of initiatives inside of our company that not only mitigates the inflation that we're seeing but actually enable us to cover that and actually grow our margins, and it's everything from expanding our own brands, really excited about our own brands that we have in advance, we have die hard we have car quest. yesterday we announced a first to market, the very first automotive company in the world to have a hybrid electric 12 volt battery that's optimized for electric vehicles. i mean, every electric vehicle, of course, has a lithium battery, but they also have a 12 volt battery, and now we've got a product under the die hard brand that nobody else will have so we have a number of initiatives that enable us to grow our margins in spite of the inflationary pressures. >> i'll confess, i can't quite
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understand a world at which the home buyers are trading at four times earnings and yet the auto stocks, you know, you guys have this kind of upbeat reaction, and yet best buy and some of the others, you know, i just can't quite figure this one out. i can't figure out what it's telling us about the consumer, about the durable goods cycle, about the strength of the economy. it feels like every sector and every data point we turn to has something completely different going on. >> it's a great question, kelly. we're fortunate that we operate in a great industry. i mean, i think you referenced the broader shift that we saw during covid from essentially experiences to goods and there was clearly some companies that benefitted from that disproportionately, and then there were some that were adversely impacted, hotel, airline, a restaurant. we were neither of the two we were sort of in the middle, and because of that as the shift from goods back to experiences occur, you know, we still are
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going to be able to grow, and that's why it's a great industry and a very resilient one in times like this. >> do you see -- let's talk a little bit about your customer and what pressures on their own personal budgets and pocket books and wallets they may be feeling, and one of them has to be the pinch of higher gasoline prices is there any connection between that and your business does it help you does it impede expenditure on auto parts, do people postpone the work they might do because, well, i just filled my little car with $63 worth of gas this morning. >> there's a lot of variables there, tyler i mean, clearly a rise in gas prices have the potential to impact miles driven, but there is a number of other variables that are going to offset that. by the way, we have not seen that to date, even in march. miles driven actually grew so i think it's a little bit to
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kelly's questionwhere people are getting back out they're going to, you know, sporting events, they're going to movies. they're going to restaurants, things that they hadn't been doing, which is putting miles on their car. so we are seeing new vehicle shortages still. that's going to extend into 2023 the key drivers of demand are still favorable for our industry in spate ite of the things that you're talking about >> yeah. >> tom, thank you very much. we appreciate it and continued good fortune >> thanks so much for having me. >> you're very welcome. >> i have a soft spot for advanced auto parts. it was my first college reporting trip when we were learning journalism. >> is that right >> roanoke, virginia >> coming up, we will continue watching these markets with stocks well off their session lows the dow is down 98 right now the nasdaq's only down 2.6%. plus, looking for safety, we are searching for yields amid
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welcome back to "power lunch. we want to get a check on some of the big electric vehicle stocks, which are firmly in negative territory today that includes names like rivian and lucid. tesla is down roughly 6% today, extending its weakness over the last few weeks and months of
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course in fact, the electric giant is down almost 30% in may alone, which would be its worst month since going public in 2010. >> watching that one, watching twitter, wondering what elon musk's next move will be. let's get to bertha coombs for a cnbc update. >> georgia voters are going to the polls today in a major test of donald trump's political strength he's strongly backing david perdue in the state's republican gubernatorial primary. that's because the incumbent, brian kemp refused to join trump's effort to overturn the 2020 presidential vote in that state. in preelection polls, however, kemp has a strong lead hyundai is recalling 239,000 vehicles in the u.s. because the device that tightens seasonseasont belts in a crash could explode instead. three injuries have been reported so far. and as the high profile hollywood defamation trial
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enters its last week, johnny depp's motion to throw out amber heard's countersuit has been denied by the judge. heard's lawyers have rested their case without calling depp to testify back over to you tyler. >> thank you very much. and ahead on "power lunch," more on this market volatility, so was yesterday's climb nearly a failed counterattack to this broader selloff, and is there anywhere investors can find safety we've got some ideas from morgan creek next
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all right, it's the 90 minute mark again. 90 minutes left in the trading day. want to get you caught up on the markets, the stocks, the bonds, the commodities and more, and where to hide amid the volatility let's begin with bob pisani with stocks off the lows of the session. hi, bob. >> we are nicely off the lows, and it's mostly due to the consumer names that we've been seeing there's been a modest bounce in mega cap tech, but not dramatically so. i noted earlier on, meta was among the biggest decliners. that was related to the snap news google's bounce, alphabet bouncing a little bit. big cap semiconductors notably down on the day. we talk a lot about peak travel,
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and when that's going to happen. we made a lot of jokes about target saying luggage sales were up 50%, well, again, today the travel and leisure names are down these have already moved down quite a bit in the last two or three weeks. the market's already seeming to bleed, the peak travel is already here royal caribbean was 75, $76 two or three weeks ago they were already down by a third, las vegas, live nation, i used to joke two months ago about how much ticket prices were this summer for the rock concerts that stock also notably down in the last three weeks or so the big strength today is the consumer names that's what's been bringing us back off of the lows so we've got coke and procter & gamble, walmart and merck doing very well. walmart was 117 just a while ago, four days ago, and you can see it's now 124 we're up 5% or 6% in the last four days. the biggest relief here, though is johnson & johnson i remarked several times last week, i never saw a 6% drop in johnson & johnson in one day
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that happened last week. that's just one of the lowest beta stocks in existence it just doesn't do that, and you can see here this nice bounce in johnson & johnson. it was 173, i think, on the close on wednesday, and you can see here, tyler, kelly, we're up, what 10% in just four days in johnson & johnson there's one of the reasons the dow is coming back back to you. >> thank you very much, bob pi pisani. now to the bond market where treasury yields are lower. rick santelli tracking the action rick, what's going on? a lot lower actually, tyler. we're looking at two-year note yields look at the chart of a two-day, you can see how we clearly accelerated when we started trading under yesterday's low yields, and it was prietty much like that on the entire curve when we took out some of the support from yesterday's low yield high prices. we're down 14.5 basis points on a two-year note. if you open up the chart, we're on pace for the lowest yield close since the 18th of april,
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let's call it five weeks and if you look at a one month of tens, their yields are down as well, about 9 to 10 basis points, which means the curve has steepened, yeah, steepened about five basis points, tens minus twos hovering around 28 basis points if you open that chart up to early april, you can see there's some pretty good support around 20 basis points. many traders are leaning on that support going into that steepening trade thinking that what we're seeing in the treasury markets and what's echoed in fed funds, look at a december chart of fed fund futures. they're off 11 basis points, meaning they're 11 basis points higher in price. they're 22 basis points off their historic lows. that means less fed. the fed can talk as aggressive as they want we're going to see the minutes tomorrow but at the end of the day, it's mr. market that really seems to be setting the stage, and the stage isn't as aggressive as it
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has been regarding -- down the road. >> interesting conclusion there, rick santelli. oil closing for the day slightly lower. pippa stevens is at the cnbc commodity desk >> hey, tyler, a muted move with the eu still trying to hammer out sanctions against russian crude. european commission president ursula von der leyen telling cnbc at davos, she hopes an agreement will be reached in the coming days, but any deal requires approval from all member states and hungary is among those still opposing an embargo. meantime, russian oil production has fallen but exports have been surprisingly resilient with supplies rerouted to countries like india that don't have sanction riskss. the firm tracked this by looking at suez canal traffic, which is up 47% this month compared to last year. this is a more expensive route, though, which is inflationary to oil prices the firm added these last resort trade patterns can portend bigger supply problems down the
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line let's check on prices, wti is at 110. just about flat on the session brent crude up half of 1% at 113.92 and nat gas up 4/10 of a percent. >> that gas keeps moving up. pippa, thank you, i guess. turning back to the markets, our next guest continues to favor value over growths and is seeing some pockets of value in selected foreign markets we'll get to that in a moment. meantime, let's bring in mark yusco, morgan creek capital management's ceo and cio mark, welcome back good to see you again. >> thanks, tyler. >> you see two things over the next 6 to 12 months. one is somewhat lower inflation. you think parts of it are transitory i'm going to ask you to elab elaborate, and two, a somewhat slower economy how do those come together into an investing strategy? >> yeah, so, you know, we just saw the numbers that pippa was showing on oil and gas you know, oil up over 100% in
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the last year. gas about 300% those are not durable increases. we're very unlike troly to see prices double again in the next year 35 75% of the cpi increase is oil prices and used car prices the chip shortage is starting to show some signs of ameliorating. my guess is that inflation numbers will trend down lower. the pundits have it down sub 2% by the middle of 2023, and i think this will be a distant memory i think that we really have to worry about is i would actually take the somewhat out of your comment, tyler i think we are going to see dramatically decreased economic activity globally. i think there's going to be a crash in economic activity if you've seen the picture of the ships anchored off the ports in china, they can't get in to unload, they can't get back reloaded to bring stuff back hear supply chains are going to get worse. you've heard people all over
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davos talking about it i think that we're on the verge of a really difficult period, and i don't want to be too alarmist, but, you know, you look at 90-year cycles, tyler, 1840s we had super high leverage we had too much speculation, and then we had a depression and then in the 1930s we had too much debt, too much speculation, and we had -- so here we are 90 years later, and that cycle is really tough so if we don't make some really smart policy decisions, i do get pretty nervous >> do you think -- let me drill a little bit on the china question if china reopens, does that scenario of depression go away or would the return of chinese capacity into the economic system take so long that it
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really wouldn't make all that much difference? >> really insightful question. i do think that the sooner they unlock themselves the better but it is going to take a while, to your point, for those supply chain constrictions to get fixed. it takes a while for ships to cross the ocean to come back into port, get reloaded. so i do think there is going to be a lag effect. you know, the way things are playing out, it reminds me so much of 2001 you know, if you remember 2000, peak of the tech bubble, all these dot coms started to collapse, but it really wasn't that bad a year. the market was only off 6% it was really in 2001 where the downdraft started. we had the first quarter negative gdp just like this year second quarter we had a little rebound, but then third quarter with 9/11 we had another down quarter, and we had a recession.
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but then the problem was we had all the frauds, the enrons, the world coms and all the restatements of the so-called earnings from the dot com bubble, and the market was really bad in 2002 so i see signs of that today >> right. >> we had just excessive valuations, too much debt, and to your point earlier, where do you hide well, you hide in the staples. you hide in companies that have this novel concept, tyler, called profits you know, gone are the days where we're going to pay 10 and 20 times revenues for companies that don't make money. >> i don't know if you've addressed it already, mark, but are you still looking to crypto as, you know, bitcoin specifically as something with major upside >> yeah, look, bitcoin in particular, kelly, you're exactly right, is the base layer of the internet of value we think this is a time to c accumulate you know, the difference between
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bitcoin and tech stocks is tech stocks started from egregiously over valued levels and now they're only mildly over valued. bitcoin today is the cheapest it's been except for 6% of the time it's been higher priced 94% of the time in its history relative to its long-term trend so it's actually on sale i like to joke that investing's the only business when things go on sale everybody runs out of the store. so we are definitely accumulators of bitcoin at these prices and we think it's a highly diversifying asset for your portfolio 0% correlated to bonds, only 0.15 correlated to stocks, and you shouldn't put all your money there, a good 2, 3, 4, 5% can add a lot of value to a portfolio over the long-term. >> it has been highly correlated to the nasdaq this year, and the valuation is predicated on using a stock to flow measure? >> it's a great point, kelly
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in deliquefyou don't get to selt you want to sell, you sell what you have to sell in march of 2020, gold, bonds, bitcoin all got crushed when stocks went down same thing here, stocks go down. people get a margin call, they can't sell the stocks because they're already down so what do they do, they sell bonds, they sell bitcoin, they sell gold. all three of those assets now are falling much less in the past couple weeks, and tech is starting to fall faster. so we think that decoupling and that diversification benefit is going to really show its strength here in the coming months. >> all right, thank you so much for your time today. we appreciate it >> thanks, kelly, thanks, tyler, appreciate it. >> you bet. let's get more on this market volatility with tech leading the declines, the nasdaq off its highs by more than 30% now. those are the november highs we'll have the technical take on where we go next plus, financials down today,
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svb, signature, discover, synchrony all lower. financials having a strong session yesterday, butot a nble to hold those gains. we're back in a moment >> announcer: the bond report is brought to you by pimco, a global leader in active fixed income that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing business customers our best deals on every iphone. ♪ ♪ another crazy day? of course—you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud.
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welcome back to "power lunch," everybody. whipsaw date for the markets with the averages well off session lows, but still down across the board our next guest is reading the charts and she says apple is near a bottom and maybe we're seeing capitulation for the nasdaq let's bring in jessica inskip. let's start with apple, everybody's watching it. what do you see? >> apple makes up such a huge piece of the market. i think it's really important to chart it whether you're bullish or bearish, understanding it has a huge component of the market it looks like it's forming consolidation around resistance levels so it's our new support. i need confirmation in order to consider that a buy. however, going back just to the dow theory and the basics of technical analysis, this is a good indication that it's forming consolidation and perhaps this is a bottom for apple and perhaps a good time to
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buy. i need to see that validated this is just step number one in that validation process to determine if we hit a bottom for that security specifically. >> by a validation you mean basically needs to start moving higher how much higher for how many days typically >> i need to see it move higher but i also need to see it not go below that support level i need to validate that that is an area of supply pushing apple back so the sellers are gone and there's just buyers at that level. really i'm looking for more validation of that support line at 139. >> and similarly, do you see the same kind of setup happening across the nasdaq? >> so i'm hoping so. so i actually took a look at xnd, which is the nasdaq 100, and compared it to the volatility index that tracks the nasdaq 100, so something when you're looking at the broad-based markets or technical analysis in general, and we're looking for -- we're looking for that high spike in volatility, which is normally easier to see in hindsight, but with x and d,
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what i've noticed is that volatility hit a new high, i believe that date was may 12th, but the underlying x and d made a new low may 20th, but volatility did not spike with it, which is a sign that perhaps capitulation happened within that specific narrow based top 100 tech views in the nasdaq >> another stock you wanted to draw our attention to was general mills, is that right general mills. >> yeah, general mills is definitely a safe bet. it's something that has a really great chart. they have a relatively low p/e for the last 24 months, and they're raising their dividend yield. it's good from a technical perspective and fundamentally it seems rather healthy and something that would be suitable in this type of macro environment. so partially contrarian, but looks like a solid buy just because everything is lining up. >> thanks very much, jessica we appreciate it >> yep, thank you.
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have a great day. >> yeah, you too all right, for more on today's tech trade and how to find opportunity amid the volatility, tune in to a cnbc special, "trading tech" with jon fortt. that's tonight at 6:00 eastern right after fast money tonight at 6:00 p.m. up next, consistency is key in today's three-stock lunch, we're going to trade three names that have been raising their dividend payouts year after year, and they're all higher today. "power lunch" will be right alcrtestksreote oc a n l ead equal. ♪ (sha bop sha bop) ♪ ♪ are the stars out tonight? (sha bop sha bop) ♪ ♪ ♪ alexa, play our favorite song again. ok. ♪ i only have eyes for you ♪
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facebook's products harm children, stoke division and weaken our democracy. teens blame instagram for increases in the rate of anxiety and depression. it's not great when your customers are voting with their feet and deciding to kind of walk away. facebook's parent company meta dropping more than 26% last week... that is more than $230 billion in market share value. when will there be accountability? how many more people need to be harmed before mark zuckerberg listens?
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welcome back amid the volatility, investors are looking for stocks that pay them back in the form of consistent dividends, and dividends that keep up with inflation. so we ran a screen of names that have raised their payout year after year and we find coca-cola, ibm and exxonmobil. let's bring in chris zackareli chris, let's get your picks for each one of these names here welcome. let's kick things off with coke. >> that sounds great coca-cola is a great company, an iconic brand they have over 40% market share in the u.s., 20% market share globally, so they're a market leader but they have room to
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grow they're diversified too. they have obviously colas and soft drinks but also sell energy drinks, bottled water and juices, so they're a great company, well diversified. it's a little expensive stock. the pe is 25.6 so that's my one misgiving. but if you have a three to five-year time horizon, it's a great stock to own it's 2.8% dividend yield so you can get paid while you wait. >> the next name is ibm. as you go through these, implicit in your endorsement if you are endorsing all of them, is it your sense there is no danger these companies will have to halt their dividends or dividend increases, i should say? >> no, that's a great question these three companies are really strong companies that have a very long track record whether it's 59 years for coca-cola or over 30 years for each of the
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other two companies are raising their dividends. so i don't think any of these three companies are in danger of having their dividends cut but if you look at dividends and price appreciation, moving on to the next name, ibm, that's one i'd be a little more concerned about. it's got a high dividend yield, 4.9%, that's the best thing about it, but it's a company that's struggled to adapt to the cloud. looking at microsoft, apple and some of its competitors, they have done a lot better and you've seen it in their stock price. so ibm is one i'd be a little more concerned about in terms of price appreciation despite the fact that it has a great dividend yield and it might be up today if i saw that correctly before going on air, this isn't one that i would chase. >> it's a shrinking company. if you look at it just strictly speaking in terms of revenue, it's been shrinking. let's look at one called exxon it used to be a big part of the dow, a big oil company i think sort of it still is. >> yeah, one of the biggest, right? so a huge oil company. oil and natural gas.
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very well positioned for this environment. unfortunately, we're in a higher inflationary environment we're having the war in ukraine, which is making things only worse from that point of view, so that's an unfortunate situation that we find ourselves in however, exxonmobil is really well positioned both to grow its dividend and grow its earnings it should probably have some price appreciation of the three stocks, it's probably the one that has the most upside over the next 12 months you know, looking at exxonmobil, one of the things that's great about it is for those people who don't have any inflation hedges in their portfolio, this is something that you could add and give you inflation protection over the next couple of years as the fed tries to fight inflation and it's going to take some time to bring things back down. >> all right, that sounds great. chris, thank you very much appreciate it. >> thank you. we have more on the market volatility and some bright spots when "power lunch" returns we'll take a look at some of them after this. (vo) singing, or speaking.
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watch this, folks. i'm going to show you that the dow industrials, they are 175 points lower right now they have come back. they almost were positive a few minutes ago but now swimming just a little bit. hang on, you never know what's going to happen in the next hour a lot of technology stocks a lot of the ad-supported tech stocks following that report earlier this morning
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it's companies like meta, google, alphabet, even amazon, which has a lot of ad-supported technology in it following slack. >> nasdaq the worst performer even with sliding rates. it's shown no matter if rates are up or down, it could be under significant pressure. >> let's look at zoom because it's a bright spot today this darling a year or two, not a darling anymore. but today year to date you see it's down 50%. but today higher by 4.86%. >> we should mention the company has managed to beat on the top and bottom lines in pretty much every report since going public. >> we have a lot of top performers in auto parts today o'reilly auto up almost 4%,
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autozone up 82 d$82. >> much better performance than the housing stocks. >> and consumer staples are coming nicely forward there, some of the ones we talk about kellogg, we just heard about general mills, campbell soup, her hershey. there's general mills up 1%. this was fun. >> watch out, tony romo. >> thanks for watching "power lunch. bye. stocks cutting their losses through the session, though the nasdaq is still under heavy pressure after snap sent shock waves across the market. the most important hour of trading starts right now welcome to "closing bell." i'm mike santoli sara eisen is on assignment in davos. we came back from the lows, down 2.5% the dow had been down 500 points it's ground its way back four of the last nine sessions the s&p has stayed below the 3900 level


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